UCP IN WONDERLAND

UCP IN WONDERLAND

Article 24 as Kim Revises in Dream

Editor's note: Kim Christensen is a great thinker. He thinks in real situations. He thinks in dreams. He thinks solutions. He thinks innovations. In dream he innovates article 24 to present it as a perfect solution to users of LC. He is great a writer - a prolific writer. What he thinks he writes. What he dreams he writes. For example, dream article 24. What he writes - he writes to share. His "thinking and writing" benefits the LC world. He is a great commentator. He comments - on UCP, on UCP draft, on ISBP, on banker's views. His commentary serves to enrich and improve LC knowledge management.

Introductory comments

Article 24 of the UCP 500 covers the “Non-negotiable Sea
Waybill”. I would rather see this (along with the other transport articles)
taken out of the UCP – and into the ISBP. There are many reasons for that. The
most important is to collect all the provisions dealing with the examination of
documents in one document, in order to provide a single tool for the exporter
in the phase of producing the documents.

As a consequence of this the following is based on the ISBP
standard rather than the UCP standard.

In addition to that the order of the information has been
changed to the same order as can be found in the document itself.

Some of the provisions may also apply to other transport
documents – but are included here in order to illustrate my view on these
items.

Non-negotiable Sea-waybill

Introduction to the Non-negotiable sea waybill

The Non-negotiable sea waybill is by nature different from
the traditional bill of lading. First of all it is not a document of title –
i.e. it is not possible to transfer the rights to the goods by endorsing the
document. Secondly the document itself
does not provide access to the goods.

When choosing the document to be required under the credit
these issues should be considered. In general the Non-negotiable sea waybill is
a “lighter” document than the bill of lading, and may ideally be used where it
is not likely that the ownership of the goods are to be transferred while at
sea.

There are a number of ways for the parties to protect
themselves – and for the Non-negotiable sea waybill to make a good match with
the credit; e.g.[1]

Require that the Non-negotiable sea waybill be consigned to
the issuing bank.

Require that the shipper transfer the right of control to
the consignee (is-suing bank).

[1] No doubt this statement is debatable – and it may be
argued that this has never been tested in court – and that it may be different
in various jurisdictions – and that it is not for the ICC to comment on such
issues. I would accept all such arguments – but see no other way to push the
usage of this document – and create the practice that seems to be desperately
lacking here

Application of the Non-negotiable Sea-waybill

Paragraph x1:

If a credit requires presentation of a Non-negotiable sea waybill,
the transport document presented must not show that it is “negotiable” or words
to that effect. This would include being issued “to order”.

Consignor / Consignee

Paragraph x2:

a) The document may
show a consignor/shipper different from the beneficiary mentioned in the
credit.

b) The credit
should stipulate the consignee to be mentioned on the Non-negotiable sea
waybill. If the credit does not so stipulate, the beneficiary should be
mentioned as consignee.

Port-to-port / Multimodal transports

Paragraph x3:

The Non-negotiable sea waybill covers either port-to-port ir
multimodal transports – depending on the wording of the credit.

The Non-negotiable must show transport of the goods between
the port(s)/place(s) mentioned in the credit.

Any transport leg (s) outside the port(s)/place(s) mentioned
in the credit will be disregarded.

Paragraph x4:

If the credit requires transport from a place (rather than a
port) the Non-negotiable sea waybill must indicate that goods are taken in charge,
received for shipment, or shipped on board in the place indicated in the
credit.

Paragraph x5:

In the credit requires transport from a port, the
Non-negotiable sea waybill must show that goods are shipped on board.

Such on-board notation must unambiguously indicate that the
goods are shipped on board in

the port mentioned in the credit;

on a named vessel; and

the date of shipment.

Paragraph x6:

If a pre-printed “Shipped on board” Non-negotiable Sea
waybill is presented, its issuance date will be deemed to be the date of
shipment unless it bears a separate dated on board notation, in which event the
date of the on board notation will be deemed to be the date of shipment whether
or not the on board date is before or after the issuance date of the bill of
lading.

Paragraph x7:

“Shipped in apparent good order”, “Laden on board”, “clean
on board” or other phrases incorporating words such as “shipped” or “on board”
have the same effect as “Shipped on board ”.

Paragraph x8:

The information regarding where the goods are taken in
charge or shipped on board and the destination may be shown in the relevant
fields on the document, or anywhere else on the document

Clean non-negotiable sea waybills

Paragraph x9:

Clauses or notations on Non-negotiable Sea waybills that
expressly declare a defective condition of the goods and/or packaging are not
acceptable.

Paragraph x10:

The word “clean” need not appear on a Non-negotiable sea
waybill even though the credit may require a “clean on board sea waybill” or
one marked “clean on board”.

Paragraph x11:

If the word “clean” appears on a Non-negotiable sea waybill
and has been ^Delete^d, the Non-negotiable sea waybill will not be deemed to be
claused or unclean unless it specifically bears a clause or notation declaring
that the goods or packaging are defective.

Corrections and alterations

Paragraph x12:

Corrections and alterations on a Non-negotiable sea waybill
must be authenticated. Such authentication must appear to have been made by the
carrier, master (captain), the multimodal transport operator or any of their
agents (who may be different from the agent that may have issued or signed it),
provided they are identified as an agent of the carrier or the master (captain)
or the multimodal transport operator.

Freight

Paragraph x13:

If a credit requires that a Non-negotiable sea waybill shows
that freight has been paid or is payable at destination, the Non-negotiable sea
waybill must be marked accordingly.

Paragraph x14:

Applicants and issuing banks should be specific in stating
the requirements of documents to show whether freight is to be prepaid or
collected.

Paragraph x15:

If a credit states that costs additional to freight are not
acceptable, a Non-negotiable sea waybill must not indicate that costs
additional to the freight have been or will be incurred.

Such indication may be by express reference to additional
costs or by the use of shipment terms that refer to costs associated with the
loading or unloading of goods such as Free In (FI), Free Out (FO), Free In and
Out (FIO) and Free In and Out Stowed (FIOS). A reference in the transport document
to costs which may be levied as a result of a delay in unloading the goods or
after the goods have been unloaded, e.g. costs covering the late return of
containers, are not considered an indication of additional costs in this
context.

Signing and freight forwarders

Paragraph x16:

The name of the carrier must appear from the Non-negotiable
Sea waybill.

The Non-negotiable Sea waybill must be signed by:

The carrier or a named agent for an on behalf of the
carrier, or

The master or a named agent for and on behalf of the master

The multimodal transport operator or a named agent for and
on behalf the multimodal transport operator

The capacity of the party signing the document must appear
from the document.

Paragraph x17:

A Non-negotiable Sea waybill may be issued by a freight
forwarder.

Paragraph x18:

The Credit should not use terms like “Non-negotiable Sea
waybill issued by freight forwarders are not acceptable” or “Non-negotiable Sea
waybill issued by freight forwarders are acceptable”. Instead the credit should
be precise as to the intention regarding who may / may not issue the document
and/or the capacity of the issuer.

a) If a credit
states “Freight Forwarder’s sea waybill is acceptable” or uses a similar phrase,
then such will be disregarded, as this is already permitted.

b) If a credit
states “Freight Forwarder’s sea waybill is not acceptable” or uses a similar
phrase, then the document must not appear to be issued by a freight forwarder.
There are a number of ways, by which such appearance can be identified. Some
examples are:

* If the document issued is a “FWB – non-negotiable FIATA
Multimodal Transport Waybill” or “HAWB –
House Air Way Bill”

* If the form used is that of an international or national association
of freight forwarders. I.e. FIATA or BIFA.

* The words “freight forwarder” forms part of the name of
the issuer of the document.

This clause has no effect on the capacity of the party
signing the document, and paragraph x16 should still be complied with.